An ad from the U.S. Chamber of Commerce attacks New Mexico Senate candidate Martin Heinrich for allegedly voting to raise energy costs “by nearly $1,000 per year” and opposing “American energy exploration.” It’s true that Heinrich voted in the House for the American Clean Energy and Security Act, but nonpartisan experts concluded that the bill would have a minimal cost to consumers. Meanwhile, Heinrich’s “energy exploration” vote was against speeding up the process to restart drilling permits just a year after the Deepwater Horizon spill, when safety reviews were still being conducted.
Clean Energy Bill Would Have Boosted The Economy At Minimal Cost To Consumers
The ad’s claim that Rep. Heinrich voted to “raise the yearly energy cost of New Mexico families by nearly $1,000” cites Roll Call Vote #477 on June 26, 2009 – a vote on the American Clean Energy and Security Act – and an analysis by the conservative Heritage Foundation.
Reuters: Experts Say House-Passed Clean Energy Bill Would Have “Only A Modest Impact On Consumers.” According to Reuters: “A new U.S. government study on Tuesday adds to a growing list of experts concluding that climate legislation moving through Congress would have only a modest impact on consumers, adding around $100 to household costs in 2020. Under the climate legislation passed by the House of Representatives in June, electricity, heating oil and other bills for average families will rise $134 in 2020 and $339 in 2030, according to the Energy Information Administration, the country’s top energy forecaster. The EIA estimate was in line with earlier projections from the nonpartisan Congressional Budget Office which said average families would pay about $175 extra annually by 2020, and the Environmental Protection Agency, which said families would pay at most an extra $1 per day.” [Reuters, 8/5/09]
- CBO: Energy Costs Would Actually Decrease For Low-Income Households. According to the Congressional Budget Office’s analysis of the American Clean Energy and Security Act, if the bill were implemented, “households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.” [CBO.gov, 6/19/09]
Study: Clean Energy Legislation Would Create Jobs, Boost GDP. According to an analysis by the University of California, Berkley: “Comprehensive clean energy and climate protection legislation, like the American Clean Energy and Security Act (ACES) that was passed by the House of Representatives in June, would strengthen the U.S. economy by establishing pollution limits and incentives that together will drive large-scale investments in clean energy and energy efficiency. These investments will result in stronger job growth, higher real household income, and increased economic output than the U.S. would experience without the bill. New analysis by the University of California shows conclusively that climate policy will strengthen the U.S. economy as a whole. Full adoption of the ACES package of pollution reduction and energy efficiency measures would create between 918,000 and 1.9 million new jobs, increase annual household income by $487-$1,175 per year, and boost GDP by $39 billion-$111 billion. These economic gains are over and above the growth the U.S. would see in the absence of such a bill.” [University of California, Berkeley, accessed 5/14/12]
Heinrich Voted Against GOP Plan To Expedite Drilling Permits Just A Year After Deepwater Horizon Spill
The ad’s claim that Rep. Heinrich “voted against American energy exploration” cites Roll Call Vote #298 on May 5, 2011 – a vote on the Restart American Offshore Leasing Now Act.
House Republicans Passed Bill To “Accelerate Oil Lease Sales.” According to the New York Times: “With rising gasoline prices and skyrocketing oil company profits as a backdrop, the House approved a bill on Thursday to force the Obama administration to accelerate oil lease sales in the Gulf of Mexico and off the coast of Virginia. The 266-to-149 vote, largely along party lines, was a skirmish in the larger battle between Republicans and Democrats to capitalize on consumer anger over the price of gasoline, which has now passed $4 a gallon in most parts of the country. The bill would reinstate auctions for the right to drill offshore, which have been pushed back by the administration to allow more time for environmental and safety reviews. Opponents of the measure said that the Republican-sponsored bill, titled the Restarting American Offshore Leasing Now Act, reflected ‘amnesia’ about the dangers of offshore drilling barely a year after the Deepwater Horizon blowout killed 11 people and spewed about 200 million gallons of oil into the gulf.” [New York Times, 5/5/11]
Domestic Production Has Little Impact On Gas Prices
Gas Prices Are Determined By Global Markets. From the Wall Street Journal: “U.S. gasoline prices, like prices throughout the advanced economies, are determined by global market forces. It is hard to see how Mr. Obama’s policies can be blamed. […] When Mr. Obama was inaugurated, demand was weak due to the recession. But now it’s stronger, and thus the price is higher. What’s more, producing a lot of oil doesn’t lower the price of gasoline in your country. According to the U.S. Energy Information Administration, Germans over the past three years have paid an average of $2.64 a gallon (excluding taxes), while Americans paid $2.69, even though the U.S. produced 5.4 million barrels of oil per day while Germany produced just 28,000.” [Wall Street Journal, 3/10/12]
Energy Information Administration Head: “Globally Integrated Nature Of The World Oil Market” And Influence Of OPEC Means That Domestic Oil Drilling “Not Have A Large Impact On Prices.” At a hearing of the House Committee on Natural Resources, Richard Newell, Administrator of the U.S. Energy Information Administration, testified: “Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements. Given the increasing importance of OPEC supply in the global oil supply-demand balance, another key issue is how OPEC production would respond to any increase in non-OPEC supply, potentially offsetting any direct price effect.” [EIA.gov, 3/17/11]
Keystone XL Pipeline Would Not Lower Gas Prices Or Create Many Jobs
Amount Of Oil Provided To U.S. Markets By Keystone XL Would Save Consumers Just 3 Cents Per Gallon. From Businessweek: “The gas price argument rests on the bump in supply the Keystone XL will bring to market. Keystone XL would deliver around 830,000 barrels a day. Not all of that would be used in the U.S., however: The pipeline delivers to a tariff-free zone, so there’s a financial incentive to export at least some of this oil. This is especially true because area refineries are primed to produce diesel, for which there’s less stateside demand. But let’s say two-thirds of the capacity—half a million barrels a day—of Keystone oil stays in the U.S. That’s a convenient estimate on which to gauge the impact of Keystone oil, because it’s the supply increase the U.S. Energy Information Administration, which provides independent data on energy markets, expected in a recent study of the expiration of offshore drilling bans. In 2008, it studied what 500,000 barrels more per day would save consumers at the pump: 3¢ a gallon.” [Businessweek, 2/17/12]
- TransCanada Itself Says Keystone XL Could Raise Gas Prices For Midwestern U.S. From an op-ed by journalist and environmental activist Bill McKibben in The Hill: “But in the case of the Keystone pipeline, it turns out there’s a special twist. At the moment, there’s an oversupply of tarsands crude in the Midwest, which has depressed gas prices there. If the pipeline gets built so that crude can easily be sent overseas, that excess will immediately disappear and gas prices for 15 states across the middle of the country will suddenly rise. Says who? Says the companies trying to build the thing. Transcanada Pipeline’s rationale for investors, and their testimony to Canadian officials, included precisely this point: removing the ‘oversupply’ and the resulting ‘price discount’ would raise their returns by $2 to $4 billion a year.” [McKibben Op-Ed, The Hill, 2/21/12]
State Dept. Estimates Keystone Would Create Just 20 Permanent Jobs. From Businessweek: “Clearly, the construction of the pipe, most of it below ground, will be a huge undertaking. The estimated number of people it will employ in the process, however, has fluctuated wildly, with TransCanada raising the number from 3,500, to 4,200, to 20,000 temporary positions and suggesting the line will employ several hundred on an on-going basis. The U.S. State Department, which made its own assessment because the pipeline crosses the U.S.-Canada border, estimates the line will create just 20 permanent jobs. One advantage of a pipeline, after all, is that it’s automated.” [Businessweek, 2/17/12]
Keystone Would Create Fewer Than 25,000 Total Jobs Per Year For Just Two Or Three Years. From a Cornell University Global Labor Institute study of KXL’s economic impacts: “[W]e calculate that the actual spending relevant to the US economy, and the figure from which US new job creation projections should be calculated, is around $3 to $4 billion, not $7 billion. […] Fortunately, the job projections submitted by developers of other major pipeline projects provide a useful guide for estimating potential impacts for KXL. On this basis, for the purposes of estimating total employment impacts, it is reasonable to assume a multiplier of approximately 11 person-years per $1 million pipeline project capital costs. […] Given a multiplier of 11 person-years per $1 million, this translates into total employment impacts of 33,000 to 44,000 person-years. So a reasonable estimate of the total incremental US jobs from KXL construction is about one-third of the figure estimated in the Perryman study and used by industry to advocate for the construction of KXL. Moreover, any job impacts associated with KXL construction would be spread over 2 and more likely 3 years. So the annual impacts are at most about 22,000 person-years of employment per year, for two years. But the annual impacts could also be as low as 11,000 person-years per year, for three years.” [“Pipe Dreams? Jobs Gained, Jobs Lost By The Construction Of Keystone XL,” Cornell University Global Labor Institute, September 2011, internal citations removed]
[NARRATOR:] Congressman Heinrich says he’s standing for New Mexico families, but let’s look at the facts. Congressman Heinrich voted to raise the yearly energy cost of New Mexico families by nearly $1,000. He voted against American energy exploration, and against the Keystone XL pipeline, which would create thousands of American jobs. Congressman Heinrich has cost New Mexico families too much. We can’t afford to send him back to Washington. [U.S. Chamber of Commerce via YouTube.com, 7/25/12]